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There are many reasons to live on less money.

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It can help you save for a big future goal such as buying a house or starting a business.

Learning how to live on less money will also allow you to become more financially secure by building your savings.

How can I live on less income?

The simple answer is by spending less than you earn. While this sounds easy in theory, it is difficult to do in practice. Emotions can get the best of you, causing you to spend money unnecessarily.

The best way to live on less income is to figure out your big why. When you align your spending with your values, spending less on everything else becomes easier. That’s because you’re putting your money toward the things that matter the most to you.

Figure out what you value the most such as family, friends, traveling, your health, and so on. These are your priorities and where you should spend your money. This can mean splurging for airline tickets to visit your family in a different state or spending more for organic food.

The key is to spend money on what matters to you and cut expenses in other areas. We all have access to a limited amount of money. Living on less income requires focusing most your spending on ways that align with your values.

How to Spend Less Money and Live Better

The best way to spend less money is reduce your spending in areas that don’t matter to you. What matters to you may not be important to someone else. Below is a list of ways to cut spending and keep more of your hard-earned cash.

Spend less than you earn

If you’re looking for ways to spend less than you earn, you need to start with your paycheck. Lifestyle inflation will slowly eat away at your salary, making you feel you haven’t made financial progress even if you make a good salary.

Bank your raises

One of the easiest ways to spend less is to save your raises. Instead of adjusting your spending every time you get a bump in salary, use it to increase your savings. Set up a transfer to your savings account to match up with your paycheck or bump up your retirement contributions.

Over time, this can significantly increase your savings rate and you will barely notice the difference. The key is to whisk the money out of your account before you have a chance to spend it.

Stash your bonuses

Getting a bonus can make you feel flush with cash. More often than not, the money gets spent and you don’t even remember what you bought. Instead of spending all of your bonus, set aside 10 or 20 percent to spend as you want.

Use the rest of the money to fund important goals that align with your values. You can put the extra funds toward your retirement, in a vacation account if travel matters to you or toward a house or car down payment.

Save your refunds and windfalls

Just like with a bonus, unexpected refunds or windfalls can feel like free money. It easy to blow through the cash and not know where the money went. Just like with a bonus, it’s important to put your money where your values lie.

Set aside some of the funds to use toward something fun. The rest should go into a savings account or use it to fund a bigger goal.

Set up automatic withdrawals

If the money is in your checking account, it will get spent. The easiest way to save more money is to set up automatic withdrawals from your checking account to a savings account. Bonus points if the savings account is at a different bank.

Focus on spending only the money you have in your checking account. This will force you to get creative and prioritize your spending.

Make a budget

Having a budget will help you align your spending with your goals. It’s a great way to see where your money is going each month so you can make changes. Making a budget isn’t difficult but can make a big impact on your bottom line.

Use your current spending as the basis for your budget. Review your bank and credit card statements from the last three to six months and group them by category such as dining out, utilities, groceries, and so on.

Once you know how much you spend in each area, figure out where you can make cuts and spend less. Spend less in areas that don’t matter to you and budget more for things that make you happy.

Try using cash

Studies show that charging your purchases on plastic causes you to spend more. That’s because you’re separated from the act of spending money until you see the charge on your statement.

Using cash can make you feel the pain of spending. The pain of handing over physical dollar bills can help you curb your spending.

Spend less money shopping

Living on less money doesn’t mean skimping on purchases or going without. It means being smart and intentional with the money you spend. Here are some ways to save money while shopping.  

Try thrift stores

Thrift stores are a great way to save money on anything from clothes to housewares and furniture. You can often find brand-new items with the tags still on for a fraction of the price of buying new.

Since most items in a thrift store come from donations, you never know what you will find. Before going online to buy something full price, check out the thrift stores in your area. You may be able to find the item you need or a comparable version for much less than retail.

Before heading out, check Craigslist and Facebook for yard sale listings in your area. There are also apps such as Yard Sale Treasure Map that help you find yard sales in your neighborhood and surrounding areas.

Check out yard sales

Another great place to buy stuff for cheap are yard and garage sales. Since people are looking to get rid of their stuff quickly, you can use this as an opportunity to get a better price. Yard sales are a great place to find children’s clothing and toys, bikes, housewares and much more.

Get paid to shop with Rakuten (formerly Ebates)

Rakuten is a great way to get paid for stuff you were already planning on buying. I’ve been using Rakuten (formerly Ebates) since 2012 and have made hundreds of dollars using it to shop online.

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Rakuten is an online portal that pays you a fee for using their link to shop at online retailers.

Setting up an account is free. In fact, here’s $10 free just for signing up and using it to make a purchase. You will find many popular retailers on Rakuten including Target, Amazon, Walmart, Bed, Bath, and Beyond, and many more.

When you click on a link through Rakuten, you will be directed to that retailer’s website to make your purchase as usual. Rakuten will pay you a percentage of your order as cash back for using their link. Checks are mailed every quarter.

Ready to get paid to shop? Get $10 just for giving Rakuten a try!

Find savings using the Honey app

If you’re shopping online, the Honey app can help you find savings on your purchases. It’s an extension for your Google Chrome browser and alerts you to potential savings when you’re shopping online.

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It saves you both time and money since it does all of the bargain hunting and price comparison for you. It’s a great tool to add to your savings arsenal.

Ready to give Honey a try? Click here to add it to your browser.

Also See: Honey App Review

Use Dosh to get cash back

Wouldn’t it be great if there was a way to make money for your purchases without lifting a finger? This is what Dosh does and it’s glorious. The app offers you cash back on your purchases at specific retailers in your area.

To get started, you need to create an account and enter at least one credit card. Worried about handing over your digits? Dosh uses bank-level encryption technology to secure your financial information. Enter the cards you use most for making daily purchases in Dosh and shop as usual.

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Check the app regularly to see what local retailers have the best cash back offers. When you use the credit cards registered under Dosh, you will automatically earn cash back. How cool is that?

Ready to get started? Here’s $1 just for downloading the Dosh app and adding a credit card.

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Get a refund with Paribus

Don’t you hate it when you buy something and it goes on sale the following week? However, getting a refund for the price difference can be a hassle. This is where Paribus can help.

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It acts as your personal shopping assistant, helping you get your money back on purchases when the price drops. It searches your inboxes for recent orders and tracks pricing changes. When it detects a price drop, it asks the retailers to refund you the difference.

Sign up for Paribus to see if it can save you money today

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Related Post: Paribus Review

Beat those bank fees with Cushion

Fees can quickly add up, draining your bank account. However, sitting on the phone with your bank to get a refund can be a pain. This is where Cushion can help.

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The app can score you refunds on fees related to credit card interest charges, ATMs, overdrafts, wire transfers, late payments, and more. The automated bot within the app will check with you before negotiating fees on your behalf and getting you back your hard-earned cash.

Cushion is free to use but it does keep 25 percent of any refunded amount it negotiates.

Ready to save? Sign up for Cushion today and see how many fees you can get refunded.

Use a cooling off period

Impulse purchases can cost you dearly over the long run. According to a survey by [source], people spend an average of $5,400 on impulse purchases every year. That’s a lot of money!

An easy way to stop shopping on impulse is to institute a waiting period before making a purchase over a certain amount. For example, waiting 72 hours before buying anything that costs more than $50.

This will help you overcome the excitement of buying something in the moment so you can consider the pros and cons of the purchase. More often than not, you’ll realise that you didn’t need it after all, saving you money.

Try a no-spend challenge

A no-spend challenge is a great way to kickstart your commitment to living on less. The way it works is that you commit to spending money only on the essentials for a dedicated period of time such as a month.

Doing a no-spend challenge can be difficult at first but as you get the hang of it, it gets easier. You may be surprised at how many times you pull out your wallet to make unnecessary purchases.

Use this as an opportunity to identify your spending problem areas and figure out lower cost alternatives or how to avoid the expense altogether.

Save on food

We all have to eat but it doesn’t need to cost a lot of money to eat well. You can eat well on less money with the help of a few quick tips and tricks. Here’s how to eat better than ever for a fraction of your current spending.

Cook from scratch

There is no way around it – cooking your own food will save you a lot over the long run. Learn how to cook and make your own meals. Most store bought foods are less healthy than what you can make at home and full or additives and sodium.

Plan your meals

Next to learning how to cook, meal planning is the best way to save money on food. Creating your own meal plan takes just a few minutes but can save you hundreds of dollars and lots of stress.

If you don’t have the time or inclination to create a meal plan from scratch every week, a service like $5 Meal Plan can be a life saver. For just $5 you get a monthly meal plan, including recipes and shopping lists. All recipes are tasty and cheap, costing less than $2 per serving.

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Ready to give $5 Meal Plan a try? Here’s a free 14-day trial to get you started.

Shop with a list

An easy way to save money shopping is by making a list and sticking to it. Use your meal plan as a basis for what groceries you need to buy for the week. In addition, check your fridge and pantry to see if you’re out of any staples.

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Make your shopping list based on what you need and bring it with you when you go shopping. Only buy what’s on your list so you can get better at planning out your shopping trips.

Use coupons

Coupons can get a bad reputation but they are a great way to save money and live on less. However, instead of clipping coupons for things you think you may need, flip the idea on its head.

Make a list of what you need to buy and search for coupons that match up. This way you’re not spending money just to save a dollar or two on items you may not need. Also, before making an online purchase, do a quick search for coupons.

Plan meals around sales

Here’s another tip that will save you hundreds this year: plan your meals around what’s on sale at your local grocery store. Check out the store circulars regularly and use the loss leaders (items on the first page) as the basis for your weekly meal plan.

Grocery stores put the items with the biggest discounts on the front page of their weekly sales circular in the hope of drawing people into the store to spend on other items. Stock up when you find a good deal and use that as the basis for your meals.


Another great way to save money on food is by using an app like Ibotta. Ibotta is a free phone app that offers rebates for items you buy. You will need to add the specific items to your list in Ibotta and scan the receipt once you buy them.

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Ibotta offers different rebates for each store that’s on the app. It includes a number of grocery stores such as Sprouts, Whole Foods, Safeway, Kroger, and many more.

Ready to give it a try? Here’s a $20 welcome bonus for signing up for Ibotta.

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Buy what’s in season

An easy way to live well on less is by eating in season. Instead of buying strawberries in December, why not try oranges or mandarins? Fruits and vegetables that are in season taste better and cost less.

Eat less meat

Meat can eat up a big chunk of your grocery budget. While you don’t have to go vegetarian, eating less meat will save you a lot of money and introduce you to new recipes and flavors. Try going meatless one day a week or plan one meal a day without meat.

The easiest way to cut meat is by starting with breakfast. Instead of bacon and eggs, try having just eggs, fruit and toast. Other options include oatmeal, yogurt with fruit or even avocado toast.

Spend less on entertainment

Having fun doesn’t have to cost a lot of money. There are ways to spend less and still have a good time. Here are several tips to get you started.

Cut back on eating out

Eating out can be a big drain on the budget, adding up to hundreds of dollars every month. While you don’t have to give up dining out completely, there are ways to do it smarter and still have fun.

Drinks can be very expensive when going out to eat. Instead of buying a drink, order water with your entree. Offer to split an entree with a friend or take half of it home to eat later as leftovers.

Focus your spending on opportunities to dining out with friends rather than on rushing through the drive through on the way home from work.

Invite friends to your place

If your friends want to eat out or go for drinks regularly, the costs can add up quickly. Next time someone suggests going to eat, why don’t you invite them over to your place? You can host a potluck or go with a fun theme such as wine tasting and cheese.

Everyone can bring their favorite wine, cheese or snacks to share and you get to hang out for less.

Use the library

The library can be a treasure trove for ways to save money on books, audiobooks, movies, and even your favorite TV show. Some libraries even offer free passes to local landmarks and museums. You can also find free classes on anything from pottery to genealogy.

Try Redbox

Redbox is a great way to watch recent movie releases for less than $2. They offer a good selection and there are usually several within a two-mile radius in most urban and suburban locations.

If you sign up for their email list, they often send discount codes that bring down the cost for a one-night movie rental to less than a $1. I’ve also had great success with just doing a quick Google search for coupons before renting a movie.

Watch what you have

Many people forget that they have a big library of available movies at their disposal. Whether this is physical DVDs or Blu-ray discs or online movie purchases, just rewatching some of your favorites is a great way to get more out of your purchase.

Borrow from friends and family

Going off the previous tip, check out your family and friends’ movie libraries and ask them to borrow something you haven’t seen or would like to rewatch. This is a great way to expand your own library for free. Make sure to offer then some of your own movies or shows in exchange.

Save on utilities

Another area where you can easily save money and live on less is on your utilities. Below are a few tips to get you started.

Cut your cell phone bill with Mint Mobile

One of the easiest ways to cut your expenses is by switching to a prepaid cell phone provider. Mint Mobile costs a fraction of major cell phone providers and allows you to bring your own phone.

Choose a plan based on your data usage and get 4G LTE data powered by T-Mobile’s network. Plans start at $25 per month for 3 GB of data and unlimited nationwide talk & text. Mint Mobile plans are based on a warehouse model – the more you buy, the more you save.

They offer a seven-day money back guarantee and an introductory plan of $15 for three months of 3 GB of data.

Ready to slash your cell phone bill? Sign up for Mint Mobile today.

Cancel cable TV

Cable or satellite TV can add up more than $100 to your monthly utility bills. The good news is that there are many cheaper alternatives such as YouTube TV, Sling TV, Netflix and Hulu that can help you cut that expense and still watch your favorite shows.

Save on electricity with Arcadia Power

Would you like to save on electricity and help the environment? Check out Arcadia Power. The company connects you to local community solar projects and purchases renewable energy certificates on your behalf.

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They also follow the market closely and negotiate lower electricity rates so you can save on your utility bills. Signing up is easy to do so you can be on your way to saving money and the planet in no time.

Ready to give it a try? Sign up for Arcadia Power today.

Insulate your home

If your home is not insulated well, you’re money is literally flying out of your doors and windows. Make sure your all frames around doors and windows are well insulated and fill in any cracks in your home’s exterior.

Use less electricity (turn off lights, unplug)

A quick way to save money on electricity is by using less. Turn off hte lights when you leave a room and unplug appliances you’re not using such as your toaster oven. They draw energy even when they’re not in use, costing you money.

Replace with energy efficient appliances

When it comes time to replace your appliances, do the research and find energy efficient options. Replacing over appliances over time can significantly cut your energy bill.

The Bottom Line on Living with Less Money

Living on less money doesn’t have to mean depriving yourself. Being frugal allows you to align your spending with your values and put your money toward what matters most to you. Use the money you save to fund big goals such as a major purchase or an emergency fund.

Spending less gives you options and can provide you with a cushion if you experience a loss of income. You will sleep better at night knowing you have extra breathing room in your budget and a savings in the bank.

Alright, those are the easiest ways to spend less money (without feeling like it.

Do you have any tips and tricks to live on less? Let us know in the comments below.

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Veneta Lusk

Veneta Lusk is a family finance expert, freelance writer and blogger. After becoming debt free, she made it her mission to empower people to get smart about their finances. Her writing and financial expertise have been featured in notable publications like MSN Money, Go Banking Rates, The Penny Hoarder and She holds a degree in journalism from the University of North Carolina - Chapel Hill. Follow her on Twitter @bcominglifesmrt or on LinkedIn at